If you are like many couples, your most valuable assets are the funds in a pension plan or retirement account. If you are facing a divorce, you and your spouse will likely need to divide this money to obtain an equitable property division.
A Milton Qualified Domestic Relations Order (QDRO) lawyer can advise you whether any of the accounts in your divorce settlement requires a QDRO. A QDRO differs from the court orders in your divorce settlement, and failing to file it can complicate matters when you try to withdraw your money.
Work with an experienced division of assets attorney to ensure you have access to the funds your divorce decree awarded you.
The federal Employee Retirement Income Security Act (ERISA) regulates employer-sponsored pension funds and 401k accounts. The law requires these retirement plans to pay money only to a named account holder whose earnings are invested. If this individual dies, the person who receives the money is a beneficiary the account holder designates.
When a couple divorces, the money a spouse earned and invested in an employer-sponsored retirement savings vehicle is marital property. Sometimes couples have sufficient assets to provide a spouse with an equitable share without dividing the retirement accounts. However, most couples will need to allow the spouse who is not the account holder to access some of the funds in these accounts.
Divorcing couples can negotiate a reasonable division of the retirement funds, but if they cannot agree, a judge will divide them. Whether the spouses decide how to divide the funds or a judge does, the divorce decree will formalize the division in a court order. However, this order is insufficient to ensure the retirement account administrator distributes the funds appropriately. A Milton QDRO attorney can provide guidance to establish the required documentation.
The QDRO is a unique form of court order that allows a fund administrator to make payments to someone other than the account holder or a named beneficiary. This document must describe when the former spouse may access the money and whether they will receive their portion in installments or a lump sum.
Scores of financial institutions and investment houses manage pension funds and 401ks. Many require a specific QDRO form; others are more flexible and accept any form that provides the necessary information. A seasoned Milton attorney is familiar with these procedures and will inquire about which QDRO the fund administrator prefers.
Spouses can obtain a QDRO once their divorce is final. However, some funds will pre-approve a QDRO, meaning a legal professional can submit a draft, and the fund will approve it or explain how it is deficient. Submitting a draft to fund administrators offering pre-approval before the divorce is final could save time.
Regardless of the timing, the form must provide instructions about who may request disbursement from the account, when, and how much they may receive. Both spouses sign the form and submit it to the court for approval and certification. If the plan approves the order, it becomes enforceable.
QDROs ensure that each spouse receives the portion of a retirement account the divorce decree authorizes. However, retirement funds cannot rely on the divorce decree alone when distributing money to a former spouse. A QDRO gives them the legal cover to make the payments pursuant to the divorce decree.
A Milton Qualified Domestic Relations Order lawyer knows the importance of this document and will submit the form promptly. If your divorce decree entitles you to a portion of a retirement account, call our firm today to ensure you have the right to access your assets.